Self-assessment season is over: how accountants may review their financial reporting

Mar 18th 2024

And breathe. For accountants, the annual early year deluge of self-assessment submissions to HMRC is at an end! Each spring is always a great time to pause and reflect on how the busy season went, but it’s a bigger opportunity than that. The spring is also a great period in which to review how your practice conducts its financial reporting, and keeps track of your clients’ money across the year. Moreover, think about those cash reserves that inevitably make their way onto a financial report, but often spend the rest of the year squirrelled away and earning little to no interest.

Use this spring to think about how you could:

  • ensure that financial data is available ahead of self-assessment season
  • create greater financial transparency between yourself and your clients
  • complete your work in less time while minimising human error
  • broaden your service offering and win more clients

Bringing finances together

In so many ways, data is its own currency – and accountants know this better than most, particularly during self-assessment season. Getting the data you need to complete a tax submission is an arduous task. It inevitably involves a stream of phone calls, emails and text messages between you and your clients – and as we all know, some clients are less responsive than others.

This becomes a more pressing issue when considering clients with numerous cash holdings, such as SMEs, landlords and high net worth individuals. These types of clients often diversify their wealth, so as to minimise the risk to their savings if their chosen bank or building society collapses. In the case of individuals, their income often surpasses the “additional” tax rate threshold, making any interest they earn potentially liable for tax. This makes income harder to track, and with the shift from annual to quarterly submissions, staying on top of that income is becoming more and more important.

The best way to comply with HMRC requirements, particularly as Making Tax Digital (MTD) is incrementally introduced, is to have continual transparency between accountant and client, i.e. a shared oversight over cash holdings throughout the year. This minimises the time usually taken to collate accurate financial data in one place. It also creates a catalyst for stronger relationships between accountants and client.

The value of cash

Many SMEs and high net worth individuals are currently choosing to keep their assets in cash, given the relative unpredictability of the UK economy and a 15-year high in interest rates. As such, your clients want to manage their cash reserves in a simple and effective way, so as to help them safeguard that money and earn interest – and that likely means they are building their own appreciation of cash savings products.

Overseeing your clients’ cash investments doesn’t have to be scary, not least because in broad terms, the current point in the interest rate cycle is your friend. It also keeps their holdings in a comparatively stable environment, which makes tax calculations over the long term simpler and easier to forecast. So, it’s a good time for accountants to familiarise themselves with a market that clients (and financial advisers) will already be getting to grips with. It’s also a good time to assess what strategies and solutions exist that can make monitoring and reporting on cash holdings more efficient.

Work with Insignis Cash

Insignis Cash stands ready to support accountants who are looking for a way of financial reporting and compliance easier and more efficient, while also reducing the potential for human error. Through our platform (free-to-use for introducers), you can encapsulate the cash savings market on one screen – covering a panel of over 40 banks and building societies. When your clients create an Insignis Cash account and fund it, you can monitor their holdings and generate both reports and forecasts in real time. We’re also delighted to work with those practices that are interested in making cash management advice a new revenue stream for their practice.

To find out more about working with Insignis Cash, get in touch.